In-plant Keeps Costs Cool for HVAC Manufacturer
Because in-plants have been offering digital color printing, on-demand production, and inventory and fulfillment support to their parent organizations for many years, these value-adding services can no longer be considered innovations. But, this doesn’t mean that providing them can’t still be transformative.
In adopting all three, the in-plant at Lennox Industries has stepped up its volume, diversified its capabilities and saved its parent company considerable amounts of money. The result, says Robert Hutchinson, manager of Print Production, is more reliance on the in-plant and more respect for what it contributes to the company as a whole.
In terms of printed output, the contribution is impressive: more than 8 million pages per month consisting of installation manuals, warranty documents, wiring diagrams, and most recently, training manuals and a sales force magazine in color. All of it addresses the commercial and residential heating, cooling and refrigeration systems that Lennox Industries manufactures and distributes globally.
The 11-employee in-plant operates out of a 6,000-sq.-ft. facility at a Lennox warehouse, parts store and training center in Carrollton, Texas, not far from the company’s corporate headquarters in Richardson. Needless to say, the in-plant’s facility has a state-of-the-art HVAC system with excellent humidity control.
Its digital printing hardware includes three Xerox devices: a Nuvera 157 and a Nuvera 314, each with a C.P. Bourg BDF-e in-line bookletmaker; and a Nuvera 288 with a bookletmaker from Watkiss. The in-plant also has offset litho capability in the form of three small-format Multilith presses: an 1860 and a pair of 1250s, one with a T-head.
They’re all black and white machines that Hutchinson and his staff of 10 put to steady, heavy use. Everything except the wiring diagrams is printed with the Nuveras, which are designed for high monthly volumes in formats up to 12.6x19.3˝. The wiring diagrams, affixed to the inner surfaces of heating and cooling cabinets, are printed on a glue-backed polypropylene stock that isn’t suitable for the heat of toner fusing. These pieces belong to the Multiliths, which turn out about 500,000 of them per month.
An On-Demand Operation
Hutchinson emphasizes that nearly everything is printed on demand, on an as-needed basis. All of the digital output is produced this way, and the in-plant never carries more than a two-week supply of the offset-printed wiring diagrams — a practice that has cut its inventory cost by $200,000. A lean-running pressroom helps to make it possible. The Multiliths, Hutchison says, print with 1.1% average waste, “and the digital equipment is even tighter than that.”
He and his team are using their digital color press, a Xerox Versant 80, with the same objectives in mind. Acquired last year, the device has enabled Hutchinson to carry out a long-planned “experiment” in digital color production that he says has paid off measurably.
Currently printing about 60,000 impressions per month — a volume that Hutchinson expects to increase as he internally promotes what the press can do — the 80 ppm, 2,400x2,400-dpi toner device has already saved the company $100,000 compared with the cost of outsourcing color work. The Versant 80’s applications include training manuals that now can display photos and diagrams in full color; and runs of NAS Top Gun magazine, a publication that Lennox Industries sends to its sales personnel and dealers.
The Versant 80, like the Nuvera presses, is leased. The in-plant’s relationship with Xerox, Hutchinson says, was a factor in selecting it. Like the Nuvera devices, the Versant 80 has helped the in-plant to shift to on-demand production with its efficiency and speed. In 48 hours the device can turn around jobs that used to take outside providers up to seven days to deliver, Hutchinson says.
Although the in-plant has right of first refusal on most of what Lennox Industries prints, the company outsources wide-format printing, long runs of sales brochures, and other jobs that don’t fit the in-plant’s on-demand profile. That could change with respect to the wide-format work if Hutchinson decides to recommend acquiring a wide-format device. This would be used to produce things like trade show banners and signage for Lennox dealer locations. He says 2018 will be a “review year” in which the in-plant will consider that option as well as the possibility of going all digital in the press department.
In the meantime, the in-plant will concentrate on another activity that draws favorable notice from the parent company: inventory management and fulfillment. This consists mainly of distributing 450 different types of brochures and other sales literature, amounting to about 2,000 pieces printed and mailed per month. The in-plant does its own postal entry in-house, subcontracting to outside mailers as needed.
Hutchinson says inventory management and fulfillment were natural opportunities for the in-plant, which is reviewed regularly to keep tabs on what it is doing to control costs. Working on a chargeback model, the shop enhances its perceived value to the company by returning any profits it makes to the corporate coffer.
Encouraging Lennox Industries to see its in-plant as a partner is the management strategy that Hutchinson endorses. Controlling costs, exceeding expectations and coming up with new ways to get more things done in-house are the mainstays of the shop’s routine as it shifts gears between the heating and air conditioning “seasons” that set the manufacturing rhythm at Lennox Industries.
Because in-plant printing is a form of manufacturing, an in-plant belonging to a larger manufacturing operation like Lennox Industries has an affinitive relationship with its parent company that in-plants serving other kinds of establishments don’t have with theirs. Although Hutchinson doesn’t think that the manufacturing connection gives his shop a special edge, he says that the interaction between the in-plant and the rest of the company is cordial and professional with few problems.
This mutual respect stems partly from the fact that it would be difficult for Lennox Industries to find an outside provider capable of managing the 4,500 documents that the in-plant keeps in active production. What’s more, says Hutchinson, “we have historical knowledge of what the product is” and what kinds of documentation are needed to support it.
Another factor is the 15 years of service averaged by the in-plant’s hard-working staff. The experience that comes with this kind of longevity helps the shop keep errors to a minimum as its mission evolves and its value to Lennox Industries continues to increase.